Business Reporter

A new wave of cost cutting has hit the media sector with Nine Entertainment announcing job cuts due to the continuing advertising downturn while its rival, Seven, axed iconic game show The Price Is Right and may also get rid of current affairs show, Today Tonight.

Nine chief executive, David Gyngell, announced to staff today that ‘‘the environment remains difficult and we have to toughen up and find ways to save costs and operate more efficiently’’.

It is understood that Nine is seeking cost cuts of up to 10 per cent.

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No numbers were given on how many staff will be let go, but sources said it will be fewer than a hundred. Nine is expected to announce voluntary redundancies within weeks.

Nine currently employs 2000 people across the Nine network, Ticketek, Allphones Arena.

The Ten Network conducted a highly public round of job cuts last year, which it blamed on difficult trading conditions, the one-off impact of the Olympics and its weak ratings performance which lead to a $13 million loss for the year.

Around 100 employees were let go including many prominent personalities from its news operations which were cut extensively.

Due to the different operating environment’s of Nine’s various businesses, Mr Gyngell said he has asked Nine Network chief Jeffrey Browne and Nine Events chief Geoff Jones to communicate to their staff the ‘‘specifics of the cost-cutting plans for their respective businesses’’.

He said the Australian media sector continues to go through unprecedented change while facing significant financial challenges caused by the continuing advertising downturn.

This is despite Prime Minister Julia Gillard announcing a date for the federal election today. The election was seen by some as a potential pickup for the advertising market.

Nine announced the cost cutting ahead of the the company being handed over to its lenders next week in return for them cancelling $3.4 billion of debt which threatened the media group with collapse. The scheme of arrangement governing the restructure was approved by the courts this week.

A new board will be installed following the restructure, including former treasurer, Peter Costello.

Nine’s financial accounts last year indicated just how badly the company has suffered under its immense debt load, as well as the media downturn.

Debt was not the only issue. Nine Network was forced to record provisions of close to $60 million over the past two years, which relate to the difference between what it must pay for some of its programming and what it will receive in revenue against the programs.